WAEC Economics 2011 Theory — Question 20

Model answer

Consumers' co-operative: an association of consumers who pool their resources together, buy goods in bulk at wholesale prices from producers and then sell the goods at retail prices to members and non-members - this is done to by-pass the middlemen and enjoy low prices. Producers' co-operative: an association of producers of similar commodities who come together for the purpose of producing or marketing their products, e.g. agricultural co-operative society. Thrift or credit co-operative society: an association of people who come together for the purpose of saving money together or making it possible for them to borrow money easily from banks; this association encourages savings and also provides access to lower interest loans; they also give loans to non-members but with higher interest. Members share profits in the form of dividends based on their contributions.